THE Law Society of Zimbabwe (LSZ) has approached the High Court seeking to be exempted from paying tax from funds collected from its members’ subscriptions, practising certificates and professional development programme fees.
BY CHARLES LAITON
LSZ filed the litigation last year and the matter is set to be heard on Thursday by High Court judge, Justice Lavender Makoni.
In his founding affidavit, LSZ executive director and secretary, Edward Mapara said his organisation was seeking a declaratory order barring the Zimbabwe Revenue Authority (Zimra) from taxing his organisation.
“This application is an application for a declaratory order declaring that in respect of subscriptions, practising certificate fees and professional development programme fees that the applicant (LSZ) charges to its members, the applicant is, in terms of section 11(b) of the Value Added Tax Act (Vat), exempted from Vat obligations,” he said.
Mapara claimed that the subscriptions and practising certificate fees they charged were approved by Justice minister Emmerson Mnangagwa for purposes of regulating the legal profession.
He cited the third schedule of the Income Tax Act, which exempts clubs, societies, institutes and associations organised and operated solely for social welfare, civil improvement, pleasure, recreation or trade, or other similar purposes, from paying income tax. “It (LSZ) meets the exemption requirements because it is a professional body, operated solely for the control of the legal profession and its receipts and accruals may not be distributed to its members,” Mapara said.
But, in his response, Zimra acting commissioner-general, Happias Kuzvinzwa disputed claims that subscriptions, practising certificate fees and professional development programme fees charged by LSZ were untaxable.
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“The fact that the applicant is a non-profit making organisation does not mean that it is precluded from charging VAT for the services that it provides.
“Annual subscriptions and fees for practising certificates are not being paid for as a result of donated services, but for the right to be a member of the applicant and to practice law in Zimbabwe,” he said.
Kuzvinzwa added that the tax exemption clause cited by the LSZ in its application only covered donated goods and services as opposed to subscriptions and practising certificate fees or professional development programme fees.
